15 Apr 2014
EMEA EM Express: Ukraine begins "anti-terrorist" operation; central bank hikes rates to stop hryvnia decline
FXStreet (Łódź) - The Ukrainian-Russian crisis remains in the spotlight on Tuesday as Kiev decided to kick off the “anti-terrorist” operation against pro-Russian demonstrators occupying government buildings in the eastern Donetsk region. According to recent reports Ukraine forces have surrounded the city of Slovyansk and attacked a military airfield controlled by pro-Russian militants.
Ukraine's acting president Oleksandr Turchynov told the parliament today that Moscow is not only targeting the Donetsk region but wants “the whole south and east of Ukraine to be engulfed by fire." He added that the aim of the operation in progress is to “defend the citizens of Ukraine, to stop terror, stop crime and stop attempts to tear our country into pieces."
The Kremlin said on Tuesday that there were no Russian forces in eastern Ukraine and that Kiev's allegations were “absurd.”
Meanwhile, the head of Gazprom Alexei Miller released a statement in which he assured the EU Energy Commissioner Guenther Oettinger that the transit of gas to Europe would continue without disruptions.
Fears of further sanctions and an escalation of the conflict with Ukraine sent Russia's Micex index down by nearly 2% on Monday. On Tuesday it fell by 1.3%. The index has already dropped by more than 10% since the beginning of the year.
In Ukraine, the central bank decided late Monday to hike its benchmark interest rate from to 9.5% from 6.5% to halt the sharp drop in the hryvnia seen since the beginning of the year. The overnight loan rate was also increased: to 14.5% from 7.5%. The currency reacted by jumping over 8% against the dollar on Tuesday, although the increase might be just short-term.
Economic data
Polish March CPI data, published on Tuesday showed a 0.1% increase month-on-month following +0.1% in February and slightly below forecasts of a 0.2% rise. On an annual basis inflation continued growing at a 0.7% pace, as expected
Also on Tuesday TurkStat revealed that Turkey's The 3mth Jobless Average edged up further to 10.1% in January from 10% in December, the highest level seen since March 2013.
Turkish budget surplus of TRY 1.67B recorded in January shifted to a deficit of TRY -5.10B in February.
Technicals
On Tuesday the Russian ruble was fairly unmoved against the central bank’s target basket of dollars and euros at 42.1805. USD/RUB rose by 0.45% at 36.1422.
On Monday the USD/RUB daily FXStreet Trend Index was slightly bullish, and the OB/OS Index neutral. RSI was at 56 at the last close and slid to 43 so far today. The Daily 2-StDev Volatility Bandwidth was shrinking at 3680 pips, with ATR (14) shrinking at 3639 pips. The 1D 200 SMA was at 33.5557, while the 1D 20 EMA was at 35.7026.
Ukraine's hryvnia surged 8.1% to 12.59 at midday.
Ukraine's acting president Oleksandr Turchynov told the parliament today that Moscow is not only targeting the Donetsk region but wants “the whole south and east of Ukraine to be engulfed by fire." He added that the aim of the operation in progress is to “defend the citizens of Ukraine, to stop terror, stop crime and stop attempts to tear our country into pieces."
The Kremlin said on Tuesday that there were no Russian forces in eastern Ukraine and that Kiev's allegations were “absurd.”
Meanwhile, the head of Gazprom Alexei Miller released a statement in which he assured the EU Energy Commissioner Guenther Oettinger that the transit of gas to Europe would continue without disruptions.
Fears of further sanctions and an escalation of the conflict with Ukraine sent Russia's Micex index down by nearly 2% on Monday. On Tuesday it fell by 1.3%. The index has already dropped by more than 10% since the beginning of the year.
In Ukraine, the central bank decided late Monday to hike its benchmark interest rate from to 9.5% from 6.5% to halt the sharp drop in the hryvnia seen since the beginning of the year. The overnight loan rate was also increased: to 14.5% from 7.5%. The currency reacted by jumping over 8% against the dollar on Tuesday, although the increase might be just short-term.
Economic data
Polish March CPI data, published on Tuesday showed a 0.1% increase month-on-month following +0.1% in February and slightly below forecasts of a 0.2% rise. On an annual basis inflation continued growing at a 0.7% pace, as expected
Also on Tuesday TurkStat revealed that Turkey's The 3mth Jobless Average edged up further to 10.1% in January from 10% in December, the highest level seen since March 2013.
Turkish budget surplus of TRY 1.67B recorded in January shifted to a deficit of TRY -5.10B in February.
Technicals
On Tuesday the Russian ruble was fairly unmoved against the central bank’s target basket of dollars and euros at 42.1805. USD/RUB rose by 0.45% at 36.1422.
On Monday the USD/RUB daily FXStreet Trend Index was slightly bullish, and the OB/OS Index neutral. RSI was at 56 at the last close and slid to 43 so far today. The Daily 2-StDev Volatility Bandwidth was shrinking at 3680 pips, with ATR (14) shrinking at 3639 pips. The 1D 200 SMA was at 33.5557, while the 1D 20 EMA was at 35.7026.
Ukraine's hryvnia surged 8.1% to 12.59 at midday.